INSTANT VIEW 4-Q1 GDP, April ADP surprise on high side

NEW YORK (Reuters) - The economy grew at a slightly stronger pace than forecast as 2008 began, helped by inventory-building that tempered a steadily deteriorating housing sector and less vigorous consumer spending.

ADP NATIONAL EMPLOYMENT:

U.S. private-sector employers unexpectedly added 10,000 jobs in April according to a private report by ADP Employer Services released on Wednesday.

KEY POINTS:

GDP: * The Commerce Department said GDP expanded at a 0.6 percent annual rate in the first quarter, matching the fourth quarter's advance and handily topping a forecast for 0.2 percent growth in an advance poll of economists by Reuters. * GDP is the broadest measure of total economic activity within U.S. borders and, despite a better-than-expected first-quarter performance, details of the report reflect widespread weakening that many analysts fear will lead to a recession. * Consumer spending that fuels two-thirds of economic activity through consumption of goods and services, grew at the weakest rate since the second quarter of 2001, when the economy was last in recession. It rose at a 1 percent rate after growing 2.3 percent in the fourth quarter. * The weakening in an already distressed housing sector was even more striking. Spending on residential construction plunged at a 26.7 percent rate - a ninth straight quarterly decline and the biggest for any three months since the end of 1981.

ADP: * Economists' median expectation was for a drop of 60,000 jobs in April, according to a Reuters poll. * ADP's March figure was revised lower to an increase of 3,000 from the increase of 8,000 originally reported.

COMMENTS:

ANDREW RICHMAN, MANAGING DIRECTOR OF PERSONAL ASSET

MANAGEMENT, SUNTRUST, WEST PALM BEACH, FLORIDA:

GDP/DEFLATOR: "We saw GDP mostly up on inventory. Some of inflation numbers looking better-than-expected. It's an overall decent number posted here. But the consumers are still struggling here obviously."

"The Fed is not going to focus on any single number. We do think they are going to lower by a quarter point and to take a pause from here for awhile."

"Inflation is in check right now with the consumers cutting back. With inflation cooling here, that's why we are seeing a bounce back in bonds here, especially on the long-end."

ADP NATIONAL EMPLOYMENT REPORT: "The ADP number is always volatile. There are some industries holding up better than expected in this housing- and consumer-driven slowdown. It did turn equity market around there."

IAN SHEPHERDSON, CHIEF U.S. ECONOMIST, HIGH FREQUENCY